A senior Ministry of Defence official has been suspended after an internal investigation was launched into thousands of pounds being spent at a luxury hotel in the West Midlands.

The official, Andrew Manley, chief executive of the Defence Infrastructure Organisation (DIO), earned about £200,000 a year and was appointed in 2011.

His suspension on full pay follows a report in the Sunday People last month on spending by top MoD civil servants.

Included in the article was a report of £5,542 allegedly being spent by Manley at the four-storey New Hall Hotel and Spa in Sutton Coldfield, near Birmingham. The hotel is publicised as an 800-year-old moated manor house.

The report said Manley, during visits to the DIO, spent 47 nights at the hotel, which was less than two miles away from the DIO headquarters.

Manley's expenditure was part of a £180m bill incurred over four years by high-ranking civil servants and officers in the MoD on hotels and car hire. The spending was revealed by FOI requests and followed a parliamentary question tabled by the Labour MP Chris Evans.

The DIO has a diverse portfolio that covers construction projects and the maintenance of airfields, naval bases and housing. It has an annual budget of about £1bn and staff of more than 4,000 personnel.

The internal investigation does not involve contracts but is related purely to expenses.

Manley, who before joining the MoD was a director with Shell, was suspended on Monday and temporarily replaced by Mark Hutchinson.

In a letter to staff seen by the Guardian, Hutchinson described the suspension as a "shock for all of us". Hutchinson said he would be telling industry partners and others over the coming days that Manley's suspension had "no connection to, or implications for our, commercial competitions".

An MoD spokesman said: "We can confirm that a senior civil servant has been suspended on full pay. It would be inappropriate to comment further pending the outcome of an investigation."

Hutchinson, in his letter, said: "It would clearly be inappropriate to speculate over the nature of the allegations that led to Andrew's suspension, or to make any further comment on the course of the ongoing investigation. I would ask all of you to respect this position and refrain from participating in or encouraging such speculation/comment as you go about your work."

Manley, in a blogpost published two days before Christmas and headlined Reflections on a busy and rewarding year, ran through some of the organisation's highlights, including a new army support command HQ at Aldershot and a contract for the Beacon Barracks site in Stafford for the 2 Signals Regiment.